Verizon Offering Credits To Keep You From Escaping Contract Without Early Termination Fee

By Ben PopkenApril 30, 2008

Alicia wants to escape her Verizon contract without paying an early termination fee, but she’s having some trouble. She writes:

Just today, I was informed that Verizon is now increasing their monthly administration charge. I have a right to cancel with having the early termination fee waived because of this increase. The Verizon supervisors I spoke to (total of 4 people) refused to follow this clause and would not waive the early termination fee even though Verizon changed the fees. They said they would give me a credit for this increase, so then it would not adversely affect me, so I can’t have the ETF waived. I made it clear that I had a right to cancel and have the ETF waived regardless of what credit they would be willing to give me. They said that having the ETF waived is not an option and they can not do that. Am I in the wrong?

Hi Alicia,

You just keep on refusing that fee waiver. The fee increase still has a material adverse effect, even if they give you a credit to cover it. If someone breaks your arm and puts it in a cast for you, they still broke your arm.

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I disagree. If you don’t pay the fee increase, it’s not a material adverse effect. Charging and refunding money transparently on the same bill is not akin to breaking an arm and putting it in a cast. This may be sneaky on Verizon’s part — collecting the fee from 99.9% of their users and giving it back to the .1% that they might lose as customers without collecting an ETF, but I see it as falling within the terms of the contract.

@punkrawka: No, i beleive you are wrong. There IS a material change in the contract. There is no disagreeing about that. Just because you don’t have to pay doesn’t mean it wasn’t changed. What happens 2 months from now when you loose the credit and they claim you agreed to the raise by paying your bill?

It would depend on the actual verbiage of the contract (que wife’s law school education here). If the out clause stated that the change itself was grounds to cancel, then goodbye. However, if the clause says that there has to be a price increase to the consumer (in this case, there isn’t since Verizon is paying), then she can take the credit, or pay the fee.

Something tells me that Verizon lawyers wrote this thing with an eye for those things, since lawyers love loopholes.

I agree with punkrawka as well – if the change has zero impact on you, it’s not a material adverse change.

Also, even if they didn’t credit you, you’d have a very hard time convincing a court that a $0.15/month increase is “material,” given that the usual definition for the term would be “would you have signed the contract if this change had been in place when you signed?”

Technically Verizon is honoring the original terms of the contract by going in and crediting the increased administrative fee.

Do you think their people don’t read up online on how thousands of people are calling in to cancel their service without the ETF? They know the legal loophole that customers are taking advantage of. They also know that in order to retain certain customers that were otherwise happy but may now have iPhone envy, they need to show that there is no adverse action being taken against the consumer.

Do I think it is a bit shady? Sure, but you are notified of the change in fees. You have a right as a customer to call in and complain. They offer the credit, which takes away the impact the fee would have on you. This also takes away [lawyers, step in] the right to waive the ETF.

In closing, think back to all those people that left for the text messaging increase when they had unlimited text messaging packages. Who was more adversely effected? The consumer, or Verizon?

I disagree. The crux of the “material adverse effect” argument here is price and nothing else, and if nothing has effectively changed in that respect, then no relief is necessary.

The arm-break analogy doesn’t hold up because the OP doesn’t suffer any initial harm at all. It’s not like (from my understanding, it’s hard to tell from the account) they charge her and then refund her the charges. THAT would be analogous to breaking your arm and then putting it in a cast.

If they are charging her and then refunding the charges, I retract my statement.

It would seem that the problem is that Verizon is not “honoring the original terms”, just promising to do so.

Can’t Alicia ask for an amended contract where the “promise” of the credit is made concrete?
I mean, it’s not like CSRs haven’t been “mistaken”- or outright lied- before, which leaves Alicia up the creek.

She has a limited time to escape the clause. That time is now, because now is when the contract changed, regardless of what concession they’re making her. If they start charging her the fee a few months from now, she can’t then attempt to leave the contract because her window will have passed. If she’s going to bail, it has to be now.

“… $0.70 to $0.85 per line. IF THE CHANGES HAVE A MATERIAL ADVERSE EFFECT ON YOU, HOWEVER, YOU CAN END THE AFFECTED SERVICE, WITHOUT ANY EARLY TERMINATION FEE, JUST BY CALLING US WITHIN 60 DAYS AFTER WE SEND NOTICE OF THE CHANGE.”

It’s in the notice itself… Verizon can’t claim to let you leave without an ETF if they say they will let you. IT’S IN THEIR CLAUSE.

The contract makes NO mention of the right of Verizon to offer credit so they can still charge the ETF.

Kick this up to consumer affairs in your area and/or the Attorney General’s office.

If more people went with a single year contract by default (even if they didn’t receive the short-term perks and benefits associated with a 2 year duration) perhaps they wouldn’t be experiencing this typical buyer’s remorse so often. It’d also be nice if cell phone companies gave better deals that aren’t exclusively tied to 2 year agreements.

Need some help with this as well: To make a long story short, I have a blackberry with the personal email plan $29.99 and I also had the tethering plan (use BB as a wireless modem) and paid $15 per month for this. In March, I purchased a MAC and tethering is not available with the VZW software, so I turned off that part of my plan. But it can be done via bluetooth. Called back to change plan and now plan requires $44.99 data plan and $15 tethering. They only offered to credit for the 2 months of extra billing, but would not go back to the other plan. Mind you plan only changed for all of 72 hrs. Any ideas?

@esd2020: The verizon contract states you have 60 days to terminate without an ETF once a material change occurs. So they credit you for 2 months then stop crediting you. You didn’t exercise your right to terminate under the 60 days provided so you’re screwed.

What, that credit? Well we never gave our CSR’s the authority to give you a credit for more than two months. They forgot to mention that to you? Sorry! You lose! You’re stuck with the higher fee, no more credit, and you’re outside the 60-day window for terminating without an ETF.

If they’re chaning the fee, explain to me how that isn’t materially adverse. She may be getting credited back, but she’s still being charged the fee, regardless of the credit, they’re still charging it. Their terms state she can leave, done deal.

If they aren’t charging her any more money, and they agree that they will always give her this credit to cover the difference, there’s no adversity. The key is getting an agreement (in writing) that the credit is a permanent addition to the account. Short of that, I think she’s in the right to demand to exercise the get-out-of-ETF-free clause.

@TheGoodReverend: But they didn’t guarantee IN WRITING that they will always provide this credit. That’s the kicker. The contract mentions nothing about credits but does state you only have 60 days to cancel without ETF based on a material change. Nowhere has Verizon indicated (as far as I can see) that Verizon will continue that credit forever, which means they could cancel it 60 days down the line and leave you with no option as far as paying the ETF if you decide to cancel at that point.

@td0t: But they’re NOT charging the fee. If I have a contract with you to sell you a car for $500, my responsibility is to give you a car for $500. If I call it a $10,500 car with a $10,000 credit, it doesn’t matter because I still performed my obligation of exchanging the car for your $500.

Likewise, if Verizon contracts to provide the service for 70 cents a month and continues to provide the same service for 70 cents a month, I fail to see how that is a material change in the terms of the contract.

I interpreted the credit to continue only as long as the OP’s original contract, and perhaps it is a valid concern to wonder they will follow through on it, despite the fact that a verbal assurances in this case would seem to be binding and I think that Verizon could be estopped from enforcing the 60 day clause if someone stayed with them in reliance on the assurance.

But regardless, that is a separate issue from the original contractual obligations. You can’t break a valid contract with your car dealership because you think they might fleece you in a year.

I think the issue here is that it’s just a CSR promising that the fees would be credited. I agree with all above who say “get it in writing or get out”. Otherwise, who’s to stop them for giving you credit for one month, then charging you the higher fee the next month, and when you call to get credit, saying that you paid so you agreed to the new terms?

One of two things can happen: you are stuck calling every month to get your $0.15 back, or they just tell you that there is nothing you can do.

CSR’s lie. Get a written promise or amendment to your contract, or insist on canceling.

To people saying this is no big deal because she is not being asked to pay any more money, that is besides the point. The point is that the contract was changed by one party, and unless she agrees to the new contract, Verizon cannot hold her to it. Unless a clause stating that she doesn’t have to pay the new price is put in the contract, she has every right to back out.

To me this is black and white, the contract changed and unless they write a clause just for you saying they will cover the increase for the life of the contract, this would be grounds for contract cancelation without ETF. Either way it IS material change. Change is change is change.

I too dealt with this with Helio and they did cancel it after a week or two of calls and filing reports wherever I can. Any time they offered credit, I refused which kept the door open for me to fight the fight. I’m sure they will cancel after all the frustration and the number of calls to customer service noted on your account.

@EyeHeartPie:
As an example that people who are saying this is no big deal will understand:

Say I signed a contractor to do some work for me on my house. We made up a contract for a room addition, with pricing included, and we both signed. Then, next week, the contractor says that he wants to change the price written in the contract because one of their suppliers changed and some item costs more than it did. Say he says that he has to change the contract to reflect a higher price for the siding, but I will still only pay the initial agreed-upon price.

Once I sign the new contract, I am held to it regardless of what the contractor says, but until I do, they have no right to force me to keep to that contract. They can promise whatever they want, but in a court of law, the contract is what the judge will look at, he will side with the contractor.

Verizon cannot change your contract and hold you to it without your agreement on the new contract. Otherwise, they could change the contract to say you have to pay twice as much as you used to and get half as many minutes, and you couldn’t do anything. The fact is that you can cancel with ANY change in the contract.

I’ve worked for two different telecom providers during two different rate-hike-contract-cancellation fiascoes. In short, unless you get this “promise” in writing (not bloody likely), and are willing to fax a copy back to them when the need arises to prove it, chances are slim to none of you actually getting this perpetual discount. Very, VERY few people in most telecom companies have the ability to place perpetual discounts/credits on an account, though plenty will promise it to get off the line. Unless you’d be happy with Verizon even if the rates go up, ignore all offers, don’t take no for an answer, and get out now.

Addendum: Also, as one poster alluded to above, payment of your bill without the discount is taken as consent to the new rates after a few months (typically 3). I’ve personally had the shitty job of telling people they’re screwed because things have been unilaterally changed and they didn’t go over every page of the bill with a fine-toothed comb. If you don’t get out now, they WILL use this loophole on you.

I work for sprint(cancelation dept) and when we had this same situation arise a few months ago we was unclear on this on our end at first but then got the offical word.If it had a effect on you.you then could cancel without and ETF.we was however able to make a offer such as either giving a monthly credit to offset the diffrence or a % discount or etc..if the customer refused offer then we had no choice to waive the ETF.But then again it all has to do with what the letter said.

@EyeHeartPie: Um, in a court of law, oral contracts are enforceable, especially if someone relies on it to their detriment (presumably not doing business with a cheaper competitor). Additionally, I think the “why would I be stupid enough to sign another contract to give away free money” argument would strongly suggest an oral addendum. The law isn’t completely illogical, you know.

@A.W.E.S.O.M.-O:
Oral contracts are enforceable only if you can prove it. In this case, it would be your word against the Verizon rep’s unless you had a recording of the conversation, and if you informed the other party that you were recording them.

My friend tried this yesterday and the same thing happened. She caved within a minute and took the $2.40 they offered her. The guy that was successful in the link was arguing with them for 52 minutes before they said okay. I’m guessing that their orders are to argue with you for a certain amount of time before they agree, cause I’m sure changing your contract in any way like that legally voids it.

@eastvillageidiot: I was offered a credit for the text message increase but chose to opt out anyway. I was only offered it once though and made clear my intention to leave. Verizon is very stubborn about it though.

Okay, I just tried doing this 5 minutes ago but was unsuccessful. I followed the instructions to use the wording of “material adverse affect” as well. I called and spoke to the CSR and told her of this recent price increase and would like to exercise my right to cancel my contract, she pretended not to know anything about it, I persisted, she then put me on hold while she was strategizing with her supervisor for like 10 minutes, she then politely restated her case that it didn’t qualify for the etf, I asked to speak with a supervisor. Sup came on and I read the paragraph about Verizon’s right to make changes to him and he told me that the increase did not qualify because it is related to a surcharge and not a change to the pricing plan. He then offered to credit me a few bucks and tried to tell me that it wasn’t a material adverse affect. I argued that it had nothing to do with degree in regards to the material adverse affect and that in their paragraph they state any change to their pricing and or other conditions not specifically plan pricing. He wouldn’t budge at all. He kept restating that surchage increase in pricing is not the same as calling plan price increases and thus it will not qualify for etf. I tried arguing for 10 extra minutes but basically caved cuz I didn’t know what else I could say.